Sprint has killed one of the few advantages it network has -- unlimited tethered data. (Source: Paramount Pictures)

Smartphones will still be "unlimited"

Sadly the rumors of the demise of unlimited tethering data on Sprint Nextel Corp.'s (S) network are true. The company announced via a support post that it would be making "effective beginning with your next bill following notification", which would in essence kill unlimited 3G and 4G data on tablets, wireless modems, and smartphone hot spots.

"Unlimited" has long been Sprint's big selling point and it's a selling point that the company's ads continue to harp on:

Now -- as the carrier has long warned could happen -- a big chunk of the company's unlimited plans are about to die. Sprint announced that it will be capping most of its existing connections at 5 GB of 3G and 4G use. Past that, you will pay $0.05 USD per MB ($51.20 USD per GB). When roaming on non-Sprint networks you'll only get a 300 MB allowance and will have to pay $0.25 USD per MB ($256.00 USD per GB).

New users can opt into a lower 3 GB plan or a higher 10 GB plan (and existing customers will likely be able to call and adjust their plan upwards, albeit at a premium).

Tethering add-on costs ($29.99 USD/month) for existing users will not change for the transitional 5 GB/month package. But for new users hotspots will cost $45 USD for 3GB, $60 USD for 5GB, and $90 USD for 10GB of combined 3G/4G data.

[Source: Sprint]

These rates are pretty horrific in that they are by far the most expensive in the industry, surpassing even Verizon Wireless's rates of $50 USD for 5GB per month or $80 USD for 10GB per month (Verizon Wireless is a joint venture of Verizon Communications Inc. (VZ) and Vodafone Group Plc. (LON:VOD)).

Factor in that ClearWire's WiMAX network, which Sprint relies upon, is available in far less regions and is generally slower than AT&T or Verizon's LTE networks, this is looking like one horrible move for Sprint and its customers. ClearWire and Sprint have plans to deploy LTE, but for now essentially Sprint is offering customers an inferior LTE network at the nation's highest price.

The only real saving grace for Sprint is that it adds, "Additionally, if your phone plan contains unlimited data, you will continue to enjoy unlimited data usage on your phone while on the Sprint network."

But if the death of unlimited tethering doesn't give Sprint customers cause to rethink their plans immediately, it most certainly will give make them pause and reconsider their subscriptions. After all, if unlimited tethering data has been killed, Sprint's days of being the last provider to offer unlimited smartphone data are likely limited as well.

To add to the disturbing picture for Sprint subscribers, we recently exposed that Sprint was turning a blind eye to text message fraud on its network. It claims to allow premium service messages -- which it reportedly profits off of -- only via opt-in, but we revealed that many customers are being charged without ever opting in.

quote: We need a poll, what percentage of Sprint users actually use tethering or other devices as opposed to just using the smartphone itself? If it's a low percentage then it won't make much of a difference.

I do. I agree with your premise, though -- probably less people tether, so the effect on the overall subscriber base will be smaller.

That said, I think this news is more significant as a sign of the direction things are going in. Unlimited data @ Sprint appears on its way out. It's just spared its smartphone plans as they are likely more sparingly used than its tethering plans @ present.

Seems to me things are moving backwards. This stuff is supposed to be super expensive and capped at first, and then over time with valid competition, the price is supposed to drop and the caps are supposed to come off.

Since there isn't really valid competition, and the competition that does exist seems to be totally happy just doing what the other guy does, data prices might continue to climb as voice call revenue drops and they look for more ways to nickel and dime.

They and digital drug pushers... get people hooked with a low cost taste, then jack the prices once they have data addiction... Maybe I should call Dr. Drew and open a mayo clinic for smartphone junkies?

No the issue was before "unlimited" really wasn't a problem because people couldn't do everything on their phone that they could on a computer. Now though phones are mini computers with wifi connections that allow the data connections to be shared with PCs and other devices. Plus the phones themselves can watch youtube videos and other streaming content like Netflix and such. So trying to support hundreds of millions of devices doing that + the few percent that really abuse connections is impossible.

Plus with faster speeds more things actually being possible, that only further increases people's desires to treat wireless data connections like they do their cable or dsl connection.

Yeah, "unlimited" anything is really just a marketing gimmick whenever limited resources (bandwidth in this case) are shared among customers. It's like an all-you-can-eat buffet: It works if your customers don't eat a lot, and all eat about the same amount. But once you start getting lots of customers who eat a lot, and the spread between the customers who eat a little vs. a lot increases, the statistical modeling used to predict how much food to make breaks down.

I'm on an unlimited phone data plan which I do occasionally use for tethering (rooted phone). But with the ubiquity of wifi hotspots, I find it impossible to go over a few GB a month. I would be sad to see my unlimited plan go away, but I don't think I would really miss it. The tiered pricing model makes more sense.

Your analogy works best if you assume that the steamtreys on the buffet will NOT be refilled if all of the food is eaten. There is only so much capacity. Once the capacity is reached speeds will either drop for everyone or people will get refused.

Sprint overselling their network only cheats their other customers.

Besides, it had to end some day. Sprint has shown a profit since the Nextel acquisition (six years). Yes, Sprint has LOST MONEY every quarter since.

I don't think they could have anticipated the explosive growth of "smart phones" and the excessive bandwidth usage that went along with it when they designed their cell infrastructure. Sprint is already spending billions on their next generation network, so I see this as a good move. They are capping something the tiny minority uses so the majority can keep their unlimited phone data plans. Honestly, how many people tether anyway?

Or you can just call them "drug pushers" and greedy fat-cats like everyone else these days...

quote: I don't think they could have anticipated the explosive growth of "smart phones" and the excessive bandwidth usage that went along with it when they designed their cell infrastructure.

Yes, because, Sprint, Verizon, and AT&T are not also ISPs, they didn't observe the rise of the PC and demand for connectivity in households across America, and they didn't have any access to sales data on their own smart phones which they sold.

Stop being apologetic to the corporatocracy. This not like drugs, connectivity and smart phones are pervasive and critical to our modern day economy. No business nor an individual should have to worry about overages dramatically impacting their fiscal livelihood. They could have built more capacity instead of taking the money and passing it to shareholders while the executive staff soaks up bonuses.

quote: Honestly, how many people tether anyway?

If the answer is few, then they shouldn't need to change plans. I use tethering for my iPad/Laptop when I need connectivity. And when I use tether those devices, I'm not (intentionally) consuming data on my phone simultaneously. There is no good argument for why tethered devices should have a separate plan, especially when you can't use data/voice simultaneously on networks such as Verizon. This is kin to cable companies claiming you need to pay a service charge for every room in your house that you wanted to connect cable TV to, otherwise you were "stealing" cable. Data is data regardless of the endpoint which consumes it.

This is not drug pushing, the more appropriate terms that I'll introduce you to (since you seem to be unaware of them) is market collaboration and price gouging.

quote: connectivity and smart phones are pervasive and critical to our modern day economy.

Even if true, this does not mean that you are entitled to connectivity on an unlimited basis. Gas is also critical to the economy. Don't expect to get that on an unlimited basis either.

quote: No business nor an individual should have to worry about overages dramatically impacting their fiscal livelihood.

False. Keep track of your usage and your budget. Don't expect the government to bail you out when you're crippled by your wasteful use of data. Just like you shouldn't expect the government to bail you out if you eat 50 donuts a day and, surprise, need triple-bypass.

quote: They could have built more capacity instead of taking the money and passing it to shareholders while the executive staff soaks up bonuses.

Guess what, you too "could" build a telecom company with "more capacity" and refuse to take money from customers. Try it. I'm sure you'll love it.

quote: There is no good argument for why tethered devices should have a separate plan...

Yes there is. It's called "supply and demand" and "capitalism." Learn about it.

quote: This is not drug pushing, the more appropriate terms that I'll introduce you to (since you seem to be unaware of them) is market collaboration and price gouging.

What you described is simply not market collaboration. As for "price gouging," I'll just simply say that the free market tolerates some forms of price gouging. That's why gas is $5/gallon in the mountains. It's called supply and demand. If you think prices should be cheaper, again, start your own telecom company, charge lower prices, and see how that works out for you.

This is pure capitalism in an unregulated market. Why would companies spend money on getting better tech developed so they can host more bandwidth to beat out their competitors when they can all just agree to cap data? They each save billions and the consumer gets screwed. It sucks for their customers, but it benefits all of the big carriers equally so they have absolutely no competitive reason not to collaborate like this. The lack of competition in this space is going to push back development and implementation of better technology for data services.

They're not drug-pushers, fat-cats, or any other derogatory word. They're just businesses making a smart decision to do what benefits them most. There is nothing inherently wrong in that, it's the heart of capitalism. It's also why a ideal free market would never, ever, ever, ever (etc.) benefit the consumer in the end. Anyone who says otherwise is either assuming that businesses are robots that will never do anything immoral, or is just stupid. Businesses play to win.

Unregulated market? That's patently false. What is going on these days? Any industry that doesn't appear to be directly under the heel of Congress for every little thing is called "deregulated" or "unregulated". The cell provider industry is VERY regulated.

Consumer getting screwed? You do realize Sprint is the ONLY unlimited data provider here, right?

quote: The lack of competition in this space is going to push back development and implementation of better technology for data services.

There's 4 major carriers and a bunch of smaller options, sorry but that's the facts. Just because you don't like a company or think they're not big enough doesn't mean it's not competition. You're just being petty!

I wasn't trying to be petty. I was trying to point out that Verizon, AT&T, Sprint and T-Mobile have a tight grip on wireless service in the US. Your list of competitors included some companies that have either been bought out by one of the big companies, or that don't have an infrastructure of their own and aren't in a position to set prices, update technology, or change policies.

Honestly, I don't think there's a big problem right now. In general I think we're probably better off with a relatively small number of nationwide wireless service providers. I suspect four mostly independent providers is enough to keep each other honest. But, I'm not sure two providers is enough, and its looking like only AT&T and Verizon will survive.

Most of the companies on that list (and most local carriers) don't actually own their own infrastructure, they lease theirs from one of the big ones. Which means that any change the big carriers make is almost guaranteed to affect customers on the smaller carriers.

The top carriers have a huge influence, and not just because they have the most customers. They also got to market first, bought chunks of the spectrum from the FCC first, and built the towers first. Short of the owners losing the company and having to sell off their assets, this isn't going to change, so the argument that competition in this space actually includes anyone except the ones with the most infrastructure (i.e., the first ones) is really difficult to make.

You have to look at the broader picture here, not just the advertising. Sprint is one of the biggest carriers and the fact that it's falling in line with Verizon and AT&T is a seriously troubling sign.

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I still think that will happen. However, it'll happen once we've got 4G networks from multiple carriers available everywhere for at least a couple years. I'm thinking 4 years or so from now before that's a reality.

With most phones having some kind of wireless access point functionality, is this really as big of a deal as some are making it out to be?

I would also tend to disagree that this move is a significant sign of where things are heading as its just too early to be making such a statement. Sprint is a discount provider, they have to offer something over their competitors to stay in business.

Unfortunately for Sprint, best-priced data plans are all they have left. Capping smartphone plans will mark their end and it looks like it's coming. As a happy Sprint customer, I'm not sticking around for the 1-2 bar service.

I tether occasionally to test VPN connections on-site by being a 'remote' user. I also occasionally use it to download spyware removal apps, definitions, updates, etc, for client PC's that are so jacked that they have no network connection.

But I rarely, if ever, use even 100MB of tethered data per month.

People using tethering for their primary internet connection (torrents, streaming netflix, downloading Windows 7 SP1) are the ones who have abused the unlimited plans and forced the industry to adopt this behavior or eliminating these plans.